Is Kraken the Best Crypto Exchange? A Detailed Review

Jan 26, 2021 08:57 PM ET
Is Kraken the Best Crypto Exchange? A Detailed Review

Today, not only can you find numerous cryptocurrencies to invest in, but also a large number of exchanges where you can transact in them. Kraken has been one of the farthest-reaching crypto exchanges, and for many years, crypto traders have been using this platform for conducting their transactions. In this review, many aspects of the exchange will be covered, including what services they offer, how you can place trades using Kraken, and their service fees.

Overview

In 2011, Jesse Powell started Kraken, and it quickly became popular due to its affordable fees, a large variety of features, and solid security features. It conducts its operations throughout the USA, with the exception of New York, Japan, the EU, and Canada. The exchange has been operational since 2013 and brought in more than $100 in revenue as of early 2019. 

Kraken presents you with around 20 distinct digital currencies to deal in, along with margin trading and futures contracts. This exchange is extremely well-regulated, so you need to go through a KYC check before you can conduct your trades.

Both individual traders and those tied to some institution trust this exchange as far as security and transparency are concerned. And, this is heightened by the fact that the Bloomberg Terminal regularly features the pricing information related to the crypto market for Kraken.

Services Offered

The services offered by Kraken include:

  • Dark Pool: If you don’t want your order book to be visible while you are trading using Kraken, you have the option to use the dark pool. Here, you can carry out your transactions anonymously without notifying other traders about them. Using the dark pool, you can avoid the unfavorable movement caused in the market by outsized orders that have been detected by others.

  • OTC Services: For trade volumes exceeding $100K, you can get access to individualized OTC services. If you trade in high volumes quite frequently, you can even get a person to manage your account and deal with all your trade-related requirements. 

  • Customer Support: With Kraken, you can get access to 24*7 customer service, no matter where you are. You can also use the chat feature and ask any questions related to the exchange.

  • Currency Trading: Although Kraken is primarily a crypto exchange, it also lets you trade in a few currency pairs.

  • Staking Service: This lets you earn some money on instruments that otherwise traders would hold and not use.

Supported deposit and withdrawal methods

Kraken Supported deposit and withdrawal methods

Keep in mind that Kraken does not give you the option of purchasing cryptocurrencies using debit and credit cards. The deposits can be made via bank transfer and cryptocurrency. The different withdrawal and deposit options are as follows:

  • Interfin

  • Canadian wire transfer

  • CHAPS

  • SIC

  • Fedwire

  • SWIFT

  • Silvergate Exchange

  • SEPA

  • Bank Transfer through Osko (only for Australia)

You will be charged a fee based on which method you choose, and it can go up to $50 or an equivalent amount. 

Withdrawal fees

Kraken Withdrawal fees

The withdrawal fees charged by Kraken are nothing out of the ordinary. If you are withdrawing BTC, you will be charged a fee of 0.0005 XBT, whereas, for Ethereum, it is 0.005. Some of the less popular coins, like Stella Lumens and XRP, cost significantly less, with the withdrawal fees being 0.02 and 0.00002. 

Pros and cons

The pros and cons of Kraken are as follows:

Pros

  • SEPA deposits for the EU cost nothing and are completed quickly.

  • You can access your account with Kraken from anywhere in the world.

  • It gives you advanced trading options.

  • Kraken is one of the well-reputed companies on a global scale.

Cons

  • It is not suitable for newcomers.

  • Verifications and deposits can be time-consuming.

Is it safe?

Security is one of the cornerstones of Kraken since it was created after the security was compromised for the Japanese bitcoin exchange Mt. Gox. Kraken was one of the foremost exchanges offering the proof of reserves audit to secure their customer’s funds. 

The majority of deposits on this exchange are stored in cold wallets, so there is no chance of you losing your funds in case there is a server breach. The company stores its servers in a secure location where they are protected by video cameras and armed guards. Furthermore, all sensitive data is encrypted, and cybersecurity experts regularly inspect the system.

How to trade using Kraken

In order to trade using Kraken, you need to follow the below-mentioned steps:

How to trade using Kraken

  • Registration: First, you need to register on Kraken by choosing a username and password. After signing up, you’ll get an activation code emailed to you. You will need this code in order to activate your account. 

  • Verification: Kraken has an extremely thorough verification process, and you have to go through five stages where you need to provide some private data so that your identity can be verified. While the initial two levels do not require you to submit too many proofs, you will need to provide a lot of them for the last couple of levels.

  • Authentication: You have the additional option of creating another password using Yubikey or Google Authenticator. 

  • Trading: If you wish to make a deposit, you need to click on "Funding" and add funds to your account via bank transfer. The fees incurred will depend on your location and the fiat currency that's chosen. There are three different trading modes on Kraken with increasing difficulty levels, and beginners should surely go for the simple option.

After this, you can start transacting in crypto via market orders and limits. The first one lets traders purchase the currency at the best possible price.

Summary

Kraken’s competitive transaction fees and state-of-the-art security attributes make it a good option for adept traders, but beginners might find the interface a bit hard to navigate through. If you have the patience to go through the lengthy KYC process, it is an exchange you should definitely consider.


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